Muzio: Surprising finding
Hiring star or elite lawyers generally does not work for law firms but it can if there are “other stars in the same area”, academics have found.
However, bringing in stars “cannot stop the rot” for a “declining group” in a law firm and “can actually make things worse”.
In 2023, the first findings from the research – led by Daniel Muzio, professor of management at York University – said that hiring star commercial lawyers was often counterproductive and actually reduced the quality of the teams they joined.
However, after digging further into the data, the academics have established that there were certain circumstances when the strategy could pan out, specifically: “The brighter the stars you already have in an existing group, the better the chances for the move to work.”
They explained: “This is probably because in these cases, the new hire is likely to view the move as a step up in their own career and therefore be more willing to adjust to their new context.
“At the same time, incumbents are less likely to view the new hire as a threat and more likely to engage in co-operative behaviours that help to quickly absorb the incoming star into the group.
“In this context, the group and the broader organisation are likely to capture and leverage the skills, competences and relationships of the new arrival and to exploit synergies between their old and new stars.
“In short, it seems that hiring stars works better when they are joining an existing constellation.”
The research is based on a study of 2,700 star lawyers and their impact at the top 100 UK law firms between 2000 and 2017, with ‘stars’ defined as those listed in the Chambers & Partners UK directories and quality measured by applying mathematical formulae to directory information.
This was combined with interviewing senior law firm management, recruitment specialists and the lawyers themselves.
The academics found that hiring star lawyers could “further improve” a law firm’s best practice groups but was “much less likely to work” in lifting the performance of weaker groups.
The best groups were “likely to have the resources and capabilities, such as robust systems, routines and relationships, required to absorb the disruption caused by the recruitment of a star”.
They might also be viewed across the law firm as “a source of competitive advantage” so that “attempts to further invest in them are less likely to cause resistance” from other parts of the firm.
“In short, the rest of the organisation is more likely to be invested in the move and committed to making it work, something that is very important in situations where there is usually a need for cross-group collaboration.”
The academics said that where a star lawyer joined a practice area where “many incumbents are stars”, they had observed “a 162% swing from negative to positive relative performance”.
This compares with the general finding that in the first year after hiring a star, practice areas suffered from relative underperformance of 10%.
Where star lawyers were recruited into a “declining” practice group, this “can actually make things worse” as existing routines, systems and relationships, which were already “under strain”, found it harder to cope with “the disruption caused by a new star entrant”.
Professor Muzio has been working on the research, which is ongoing, with Professor Claudia Gabbioneta, chair in accounting and management at York University and John Mawdsley, associate professor and co-chair of the strategy and business policy department at HEC Paris.
Professor Muzio told Legal Futures that previous research looking at star scientists and financial analysts had shown that their arrival at organisations could have a “negative effect”, but he was “surprised” to find that in the legal sector, under the right circumstances, they could have a positive effect.
He would not say whether this justified the huge salaries paid to some star lawyers.
Where practice areas improved, a “strong argument” could be made for “very competitive salaries”, but it could also make other people at the law firm jealous both of the star’s salary package and the attention they received.
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